Croatia urged to maintain corruption fight as it joins EU

By bne IntelliNews July 1, 2013

Andrew MacDowall in Split -

Across Croatia, the bunting is up and parties are set to kick off in the main squares of its towns and cities as it celebrates re-entry to the European mainstream. But as Croatia seals EU membership, anti-corruption analysts are urging the country to maintain the fight against graft.

Amidst the good cheer, economic reform has stalled and GDP has not shown meaningful growth since 2008, yet Zagreb has pushed past the strict criteria to join the club. Now, with the watchdog concerned that having achieved its goal Zagreb's efforts to stamp out graft risk coming to a standstill, Transparency International (TI) has slammed the failure to really get to grips with political corruption.

For Croats, always proudly Western-looking, favourable comparison to their Balkan neighbours in a report looking into party political financing in the region will come as scant consolation. The international watchdog focused on Croatia's opaque system of campaign financing as a particular weakness.

"Croatia should make political party financing more transparent to strengthen its democracy as it prepares to join the European Union (EU)," TI said in a statement. The report ranks Croatia third from bottom in the region in terms of "the reliability of political parties' financial reporting", beating only Serbia and Macedonia.

"According to the report, independent experts in Croatia estimate that official reports on campaign financing only cover up to 50-60% of the actual revenue in campaign budgets," TI said. A common issue across the whole region is that structures and legislation are in place, but implementation is patchy, and this is apparently the case in Croatia's efforts to increase transparency.

"A lack of reliable and accurate financial reporting from political parties leaves the door open to corruption and abuse of the democratic system by wealthy donors, including big business," said Anne Koch, Transparency International's regional director for Europe and Central Asia.

Unholy alliance

Luka Oreskovic, a Croatian researcher at Harvard University, told bne that the issue of election campaign finance in Croatia is closely tied to the broader challenge of corruption, and that efforts to tackle graft have necessarily to encompass those to enhance transparency in political funding. However, he concedes that reforms in recent years have substantially reduced the flow of suspect money.

Previously, an unholy alliance between parties and PR and marketing companies led to the recycling of cash from the advertising spend of state-owned enterprises (SOE) back to the ruling party. Oreskovic says that this channel has now been "completely eradicated," noting that state-owned companies (of which Croatia still has a number as its privatisation efforts have slowed) are now banned from using PR agencies.

That makes it "highly unlikely that services of PR and marketing companies will be used by SOE's in exchange for later favorable campaign financing and advertisements for the party in power," Oreskovic suggests. However, TI's report suggests "there is evidence to suggest that the media and advertising companies sell advertising space to parties and candidates at different prices", despite legislation intended to stamp out these practices.

As the watchdog says, Croatia has gone further down the path of tackling high-level corruption than most of its neighbours. The jailing last year of former prime minister Ivo Sanander for graft and war profiteering, for instance, has few precedents. Oreskovic cites it as an example of the country's seriousness in the struggle.

The hope is that Croatia's long-awaited EU membership will be an incentive to intensify that campaign, rather than to stall it, as many claim happened in the CEE states that entered the European bloc in 2004.

Related Articles

Macedonia kept on hold as Balkans edges towards EU goal

Clare Nuttall in Bucharest -   Macedonia’s EU accession progress remains stalled amid the country’s worst political crisis in 14 years, while most countries in the Southeast Europe region have ... more

Ruling SDP loses Croatia election but opposition HDZ fails to win it

Andrew MacDowall in Zagreb - Croatia’s conservative opposition has eked out a narrow victory in parliamentary elections on November 8, but having fallen well short of a majority after running a ... more

Croatia's HDZ takes lead in general election

bne IntelliNews -   Croatia’s opposition Patriotic Coalition, led by the Croatian Democrat Union (HDZ), looks to have won the general election, but the new government will be decided by the ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.